Primer on climate change issues and the zero carbon economy bill

February 7, 2018

NZ is well behind many countries especially the UK in considering climate change issues, though our new Government has signaled a much more proactive approach. However it is not yet clear what this really means.

Climate Change

Whilst climate change might affect agriculture and water supply for hydro generation, it is generally regraded that the threat to our coastlines is the most imminent and potentially disruptive impact, and it doesn’t help that the eastern coastline has been in degradation mode for some time. The Ministry of the Environment has produced a review of the situation in regard to coastal issues (1, 2), as has the Parliamentary Commissioner for the Environment (3). The Ministry has also formed an advisory committee on adaption to climate changes which published a relatively comprehensive and seemingly damning report in December 2017 (4). They observed that there is ……

no strategy, plan or common goal for how New Zealand can adapt to climate change

inconsistencies in timeframes and in some instances competing objectives across legislation and policies related to climate change adaptation, resilience and disaster risk reduction

limited enabling tools to help facilitate adaptation, including the use of national direction tools

lack of alignment in how climate change adaptation and resilience objectives are incorporated into legislation and policy

And a further comment……. ‘the current decision-making framework does not support or incentivise effective adaptation at the scale we consider necessary for maintaining and/or improving the well-being of New Zealand’s current and future communities in the face of a changing climate………overall there is limited evidence of proactive action that reduces medium- and long-term changing and increasing risk profiles. In most cases, actions have been reactive and part of a sector’s natural hazard management response after extreme events occur, rather than being proactive and undertaking preventative measures which take a long- term view and consider the wider impacts.’ The committee is due to report again in March on possible options for addressing the issues raised.

The Zero Carbon BillThe established view is that the world is awash with oil following the collapse of the OPEC cartel, the discovery of new Artic reserves and the Canadian tar sands, and the new cheap and highly successful fracking technology. The lower oil price implied suggests the world will not readily reduce its carbon consumption, notwithstanding the latest projections make for a seriously faster temperature rise than expected, impacting on agriculture, weather and sea levels. However informed commentators are talking about the world having to become a net carbon absorber by about 2050 to avoid serious harm.

It may be that the new electricity technologies in development will provide a step reduction in the cost of low carbon electricity. These opportunities for a more electrical economy involve improved solar electricity technologies in development using new exotic films with graphene and perovskite (a form of calcium titanium oxide) along with new storage technologies including new battery technologies such as lithium – air and its variants. These would edge us closer to a fully distributed electricity system, and allow the a progressive reduction in the massive costs associated with generation and distribution in the current electricity system.

NZ’s emissions make up only about 0.15% of the world’s total emissions, although we are right up there with the largest emitters on a per capita basis, for example four times higher than Sweden. Unusually, half of our emissions are made up of non-CO2 gases – CH4 and N2O – due to our large agricultural sector and abundant sources of renewable energy for electricity.

NZ has so far relied heavily on international trading of carbon credits to deliver its emission reduction contributions. The (prior) Government has stated its intention to contribute its “fair share” to tackle climate change. However it clearly believed that because of the high proportion of biological and transport emissions the cost of mitigation is likely to be higher for New Zealand than for most other developed countries, and that remaining competitive with trade partners, while taking responsibility for emissions reductions targets, would present a challenge for NZ.

The new government has wasted no time in commencing the drafting of the Zero Carbon bill. The general ideas behind the bill are set out in a cabinet paper released in late December (5). The aim is table the bill in October 2018. The Cabinet has already approved new funding and the formation of an interim Climate Change Committee as a precursor to the Commission to be established in the bill and to undertake preparatory investigations for it.

Some of the key ideas in the paper are:

net zero carbon emissions by 2050

100% renewable energy in a normal year

special focus on agriculture and energy

international leadership by example (obviously not by impact)

building a low emissions brand around exports

building new low emission technologies that can be exported

tree planting, ev’s

The intention seems to be to model the bill on the UK’s approach (6) including the setting of carbon targets, an independent Climate Change Commission, a trading scheme that works, adaption planning, and incentives to produce less domestic waste.

The basis for this policy is a report called ‘Net Zero in NZ’ prepared by the London-based Vivid Economics for a consortium of organisations and donors called Globe NZ and published in early 2017. I understand a significant number of labour politicians attended the discussions (7).

In August 2017, the Productivity Commission produced an issues paper on a low – emissions economy and sought feedback (8). The final report is imminent. The report is largely a rehearsal of policy and economic tools available to deliver a low – emissions economy. A lengthy appendix describes the UK Act and its application to NZ (9). It appears that the Act has propelled the UK into a leadership role in this area and that the UK CCC has become a really valuable and contributing organisation.

The CCC advises on the UK’s transition to a low-carbon economy and preparing for increased climate risk. Its main functions are: